A short parable
Two commercial airline flights approach an airport. The radio on the control tower comes alive: “Tower, flight 391 requests immediate landing instructions.” The air traffic controller responds, “Affirmative, flight 391, you are cleared to land on runway N36. Immediately afterward, “Tower, flight 496 requests immediate landing instructions.” The answer, “Affirmative, flight 496, you are cleared to land on runway S144.” Suddenly both flights respond in loud voice, “Tower! Runway N36 is the opposite end of Runway S144!” There is moment of silence after which the air traffic controller responds, “Affirmative flights 391 and 496, landing instructions confirmed. You guys be careful now, OK?”
The recent declarations of Dilma Rousseff are like the instructions from the tower. She has indicated that Nelson Barbosa is to get the economy growing again and to do so without any sharp turns or abrupt movements – i.e. being careful.
How that is gonna happen is beyond my comprehension. Apparently, Barbosa will be dispatched to the Brazilian Titanic to weigh anchor and start the debilitated ship on the way to Paradise with instructions to “be careful”. Dilma will proceed to Paradise via the land route mentioned in a previous blog post and rendezvous with the ship at port with a band playing and flags waving.
Some argue that the Brazilian Titanic is no longer seaworthy in its present condition.
We will soon find out!
Recommendations:
Break out a life jacket and make sure you have access to a lifeboat. The Brazilian Titanic is seriously overweight and the sea is over the ship’s waterline.
It will be a perilous voyage.
I guess that’s enough metaphor for this post. Most analysts agree that trying to force growth will only exacerbate inflation and unemployment. The “numbers” simply do not add up to yield success.
As usual there is no lack of imaginative ways to approach the challenge. Fantasy reigns supreme.
It’s useful to remember that the “economy” is not the issue. The issue is holding on to power regardless of the economic effects. The objective is to make the state the sole source of economic decision-making and policy and for the PT to “rule in perpetuity”. The government intends to impose the “new economic framework” (which is really a very old economic framework) that will simply isolate Brazil from the rest of the world.
The “new middle class” of the Real Plan can be expected to return to its former condition of aspiringto middle class and will proceed to Paradise in steerage class.
As I mentioned in a previous blog post, if your global strategy requires that you have a presence in the Southern Cone of South America, Argentina is now your best hope. Otherwise, look to Chile and Mexico for the “Latin American connection” in the short-to-medium term and join the “new middle class” in Brazil in its hope for longer-term improvement.
Apologies for raining on your Christmas parade!
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